Need for equity release tipped to grow

Posted 19/02/2010

The mounting problems relating to retirement income are likely to lead to a rise in demand for equity release products, according to a new study.

A survey of equity release providers carried out by trade body Safe Home Income Plans (Ship) found that 58 per cent believe there is a growing need for their products.

This was identified as the major reason the sector has a promising future by the companies, although some also predicted that increased regulation and a strong code of conduct would help it to expand.

Andrea Rozario, Ship’s director general, said that while there are plenty of reasons for optimism in the sector, equity release providers had to work hard to improve their reputation in order to build confidence among people who find their retirement income provision is not sufficient.

“It is vital that consumers have the confidence to speak to an expert about equity release rather than struggle to survive,” she said.

Despite well-publicised problems with pensions, demand for equity release fell during 2009, with Ship’s statistics showing that the number of plans sold dropped from 28,224 in 2008 to 20,492.